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Chengdu inject capital to set up factories, The cooperation between China and Australia is frequent.

2019-6-6

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China and Australia have cooperated frequently recently. From July 10 to July 15, two ASX listed companies announced that they would set up factories in China in order to open up the Chinese and Australian market and speed up the localization of their products in China. It is not difficult to see from all the signs that the listed companies and the government of China and Australia are determined to speed up the distribution of their core industries in the market.
On July 13, Cochlear (ASX: COH) announced today that it plans to invest about A$50 million in China to start a new plant to produce cochlear implants and acoustic processors, which is expected to increase its global manufacturing capacity by 50%.

According to the announcement, the new factory will be located in Chengdu, Sichuan Province, and the products will be specially supplied to China and emerging markets. It is expected to be put into production within four years, depending on the time of approval.

In recent years, Collier has continuously increased the overall productivity of its product portfolio. In 2010, the company set up a global headquarters and manufacturing facility on the Macquarie University campus in Sydney. Earlier this year, it added factories in Lane Cove, Australia, and is upgrading and expanding Brisbane's plant capacity.

Chris Smith, president and chairman of the board of directors of Collier, said that Collier had been in the Chinese market for more than 20 years, and the investment highlighted the importance of the Chinese business. China has become Collier's top five markets and the fastest growing market, with huge potential for future development.

Smith said, "China has a highly skilled and growing team of Audiology professionals, and the level of scientific research in the treatment of hearing loss is also improving. Moreover, the Chinese government has provided strong support for the use of Coriel products in children's patients.

On June 14, Australian blood products giant CSL announced that it would buy the controlling interest of Wuhan Zhongyuan Red Biological Products Company for $352 million from China Fujian Pharmaceutical (600079). Similarly, localization of manufacturing capacity is one of the important motivations for CSL to acquire Red Biology. Ryder Biology has manufacturing plants and many plasma collection centers in China.

It is understood that SIEPA has proposed to open Chengdu Hearing Medical Center near Collier New Factory, similar to Australian Hearing Medical Center in Sydney, to bring together hearing care related institutions for collaboration. Collier said he would support it.
On July 14, Wattle Healthy Australia (ASX: WHA), a newly listed milk powder company, announced two major operational developments in succession, both related to China's market business plan.

On Wednesday, the company announced an 80% stake in Blend & Pack (B&P), an Australian infant formula and nutrition company, in partnership with Hong Kong-listed Minxin Financial Control (0273). B&P is one of Australia's nutritional dairy manufacturers with export licences to China.

Wattle Healthy Australia plans to invest 5 million Australian dollars to buy a 5% stake in B&P, and WHA has paid a 10% margin under the agreement. Current transactions will depend on the final due diligence and are expected to end within 28 days. The acquisition will strengthen the relationship between the company and major suppliers and lock in the supply channels of nutritional dairy products.

In a prospectus issued on January 13, Wattle said that the Chinese government announced that it would implement the new inspection and quarantine regulations from January 2018, and that processors certified by the National Certification and Accreditation Supervision Commission (CNCA) could link up to three brands. At present, B&P is one of the eight infant milk powder manufacturers in Australia which have been certified by export licence. According to the agreement, WHA will become the first brand to receive quarantine certification through B&P. Once the transaction is approved, from January 1, 2018, WHA will continue to sell infant formula products in China through online and offline channels.
WHA headquarters in Melbourne, Virginia, is committed to research and development, purchase and sale of high-quality food originating in Australia. The goal is to create Australia's preferred brand in the domestic market, while continuously expanding the international business scale. In particular, we are optimistic about the growth potential of China's consumer market. Since its listing, the company has signed distribution agreements with a number of enterprises, including Australian department store giant Metcash and China's large mother-to-child department store chain Aiyingdao.

On the other day, WHA issued another announcement that it had signed a distribution agreement with Tesco Lotus Chain Supermarket, Tesco PLC Branch of Tesco, a global supermarket chain group. As part of China's regional development strategy, Tesco has recently entered Guangdong Province, China. According to the agreement, the approved WHA infant formula products can be sold in Guangdong supermarket. In addition, Tesco Group plans to continue to open up Shenzhen market in the second half of this year, with the goal of entering a wider retail market in China.

Lazarus Karasavvidis, executive chairman of WHA, said the partnership with Tesco further strengthened the Wattle brand's international influence, especially in the Chinese market. At the same time, the strategic acquisition plan for B&P will ensure that Wattle Health Australian products pass the quarantine certification requirements for infant formula by Chinese regulatory authorities. In the future, China's market has great potential for development, and the company's sales are expected to increase steadily.

According to public data, Blend & Pack International Dairy Co., Ltd. of Australia was founded in 2007. It adheres to the use of high-quality milk sources, high-tech formula and high-tech production technology to produce high-end series of milk powder for the healthy growth of infants and young children. According to the announcement, in fiscal year 2017, the turnover of B&P exceeded A$26 million and the net profit after tax reached A$5.5 million or more.

Minxin Financial Control Co., Ltd. mainly provides a series of financial related business for various enterprises, financial institutions and individual customer groups in Hong Kong. Including the provision of securities, futures, options trading, service enterprise financing, asset management, strategy and direct investment. At the same time, Minxin financial control also involves medical care and maternal and infant care and other related businesses, using the existing financial service platform to expand the scope of business.

Genius Link Asset Management is the co-founder of Minxin Financial Control.